Income Tax Severed Letters - 2019-01-30

Ruling

2018 Ruling 2018-0777441R3 F - Post-mortem planning - Pipeline

Unedited CRA Tags
84.1, 84(2), 245(2)
pipeline with series promissory notes with embedded repayment terms issued on PUC reduction

Principales Questions: Post-mortem planning.

Position Adoptée: Favourable rulings provided.

Raisons: Wording of the Act and previous positions.

2017 Ruling 2017-0693751R3 - Transfer of Shares of a Foreign Affiliate

Unedited CRA Tags
15(1), 40(3), 53(2)(b), 54, 56(2), 85.1(3), 85.1(4), 69(1), 69(4), 93(1), 93(1.1), 92(2), 93(1.11), 113(1), 258(3), 258(5), 5901(2), 5902(6)
step-up in FA shares transferred into New FA and then sold for note to an affiliated Canco limited to sum of RCB and net surplus
s. 69(11)(b) inapplicable to transfer of FA to new FA who will use the excluded property exemption
affiliated transfer of shares at gain equal to exempt surplus did not cause loss of capital property status

Principal Issues: (1) Will a rollover of shares of a foreign affiliate from a Canadian corporation to another foreign affiliate followed by a transfer to a related Canadian resident corporation (that is not a “Canadian corporation”) for less than FMV trigger the benefit provisions in subsections 15(1), 56(2), 69(4) or 246(1)? (2) Will subsection 245(2) apply to the transfers? (3) Will paragraph 69(11)(b) apply?

Position: (1) In the particular circumstances, no. (2) No. (3) No.

Reasons: (1) Ruling granted previously in similar circumstances - transaction not to confer benefit – in particular, transaction at less than FMV permitted tax deferred transaction with restriction of ACB of the foreign affiliate shares to amount of the transfer. (2) The transactions are not a misuse or abuse of the Act or its provisions. (3) The “one of the main purposes” condition has not been met.

Ministerial Correspondence

26 November 2018 Ministerial Correspondence 2018-0776571M4 - Fraudulent investment - recourse

Unedited CRA Tags
220

Principal Issues: Request for T1-Adjustment that was previously denied.

Position: Recourse options explained.

Technical Interpretation - External

28 December 2018 External T.I. 2018-0785211E5 - Mineral resource certification - Jade nephrite

Unedited CRA Tags
Definition of "mineral resource" in subpara. 248(1)(d)(i)

Principal Issues: Does the jade (nephrite) property described in the letter meet the definition of a "mineral resource", pursuant to subparagraph 248(1)(d)(i)?

Position: Yes.

Reasons: Minister of Natural Resources opinion.

12 December 2018 External T.I. 2017-0718661E5 - Private health services plan

Unedited CRA Tags
6(1)(a); 248(1)
coverage for employee's U.S. medical expenses would qualify if they were substantially METC-type expenses
Words and Phrases
substantially all
coverage for U.S. expenses of METC type generally eligible

Principal Issues: Whether employer paid premiums for the health and medical plan, on behalf of their employee, are excluded from the employee’s income.

Position: Question of fact.

Reasons: See response.

13 April 2018 External T.I. 2017-0682891E5 - Taxable benefits

Unedited CRA Tags
6(1)(a), 6(1)(b), 6(1)(b) )(vii) and (vii.1)
monthly payments to cover employed bus driver costs were taxable since no receipts required

Principal Issues: Whether an employer’s fixed monthly payments provided to its employees under various scenarios should be included in the employee’s employment income.

Position: Question of fact.

Reasons: See response.